TS officials discuss implication of GST on 2BHK housing scheme

Hyderabad: Special Chief Secretary (Housing) Chitra Ramchandran on Tuesday conducted a one-day orientation program for all the Nodal officers and Executive engineers who are involved in implementation of 2BHK Housing in the state along with the State Tax Department headed by the Commissioner, State Taxes for creation of awareness and exposure on implication of GST in ongoing projects of 2BHK housing.

During the session it was arrived with examples that there would not be any burden of GST to the 2BHK houses of ongoing projects which were started prior to GST regime under VAT. In fact in all residential buildings, there would be nearly 70% of the value of the material component is available and 30% is labour component.

As far as the unit cost of 2BHK i.e., Rs.5.04 lakh in Rural area, the value of work will be Rs. 4,80,000 leaving a balance of Rs. 24,000/- provision is available towards VAT under pre GST regime.

It is estimated that an average of 5 to 8% input tax credit is available to the contractor on procurement of construction material required like cement, steel, electrical, sanitary fittings etc apart from Rs 24000/- set apart for TDS (Previously).

Therefore 5% tax to be deducted under TDS on payments from Rs.4.80 lakhs as per Govt Memo No.33/WP/A/2017 Dt.08.08.2017 of Finance (WP) Dept.

The rates in SoR of previous years are inclusive of taxes on goods, but after GST regime the rates in the SoR are without taxes.

In view of implementation of GST from 1.07.2017 all the Nodal Officers should necessarily have GST Registration one for GST deductor and second for GST tax payer at district level for smooth filing of monthly returns and avoid penalties.

In the afternoon session live demonstration on newly developed Project Monitoring System (PMS) for the utilization of districts for monitoring of 2BHK housing progress .

The system will take care of the smooth flow of funds apart from tracking funds flow, making payments to contractors without delays, statutory remittances in-time, monitoring physical progress w.r.t the expenditure, ensuring accountability and transparency in implementation of 2BHK Housing projects and to avoid future audit objections. (INN)